SIKI MGABADELI: Good evening and welcome to the SAfm Market Update with Moneyweb. My name is Siki Mgabadeli.
We are going to unpack that decision by the Monetary Policy Committee of the Reserve Bank to keep the repo rate unchanged at 6% today.
In our Back to the Future feature we focus on pharmaceutical group Adcock Ingram. We are going to look at the investment case for that business.
In this week’s SME feature marking Heritage Month my colleague Tumisang Ndlovu speaks to Molemo Kgomo who is the founder of Ntomb’entle Dolls, about her traditional toys.
Chris Gilmour is watching the markets for us today. But first, let’s start with your business news headlines.
The Reserve Bank’s MPC has unanimously decided to keep the repo rate unchanged at 6% amid concerns about sluggish domestic economic growth and the downward pressure of the lower oil price on inflation. Governor Lesetja Kganyago said that the global economic outlook has become more uncertain since the previous meeting of the MPC in July, driven partly by financial market turmoil off the back of concerns around China’s growth and the US Federal Reserve’s delay in increasing interest rates, which has “added uncertainty to an already volatile global setting”.
CPI slowed to 4.6% in August from 5% in July. Economists had expected prices to rise by 4.8%. Core inflation, which excludes food, non-alcoholic beverages, gasoline and electricity costs, slowed to 5.3% in July from 5.4% in the previous month.
Nampak plans to build glass-bottle manufacturing plants to take advantage of growing demand for packaged consumer goods and bottled drinks in the two countries where a quarter of Africans live – Nigeria and Ethiopia . Nampak says it had reached a preliminary agreement with a partner for a factory in Ethiopia and is now seeking financing for a potential $68m project cost. That will help supply drink makers, including brewer Heineken and soft drinks producer Coca-Cola. Nampak says it has also made good progress on a Nigerian factory.
Starbucks’s local partner sees potential for more than 200 of the US chain’s coffee shops in South Africa within five years. This as it prepares to open the country’s first Starbucks outlet next year. Starbucks signed an agreement with Taste Holdings in July that licensed the South African restaurant operator to develop and run Starbucks branded coffee shops in Africa’s most advanced economy. The first store is expected in Gauteng province within the first half of 2016. Starbucks’s entry into South Africa will pit it against established brands such as unlisted Cape Town based Vida e Caffè, a local firm with more than 60 outlets.
A look at the markets now. The all-share ended up just over 1% at 50 381. The Top 40 index is up 1.21%. The rand is at R13.82/dollar, R21.04/pound and R15.43/euro. Gold is at $1 132.12/oz, platinum at R930.05/oz, and Brent crude oil at $49.45/barrel.